Activation of the NMDA-type glutamate receptor requires the simultaneous binding of both glutamate and a coagonist, either glycine or D-serine. In the inner retina, glutamate released from bipolar cells excites NMDA receptors on retinal ganglion cells and some amacrine cells. The identity of the coagonist, however, has remained unknown. Early on, the relatively high levels of glycine and its use in the retina as an inhibitory transmitter by a subset of amacrine cells led many to believe that glycine was the endogenous coagonist. The discovery that D-serine and its synthesizing enzyme, serine racemase, are both present in the retina suggested that D-serine may play a role as well. This manuscript reports results that have examined the role of D-serine in the retinas of larval tiger salamanders and in mice. These studies suggest that D-serine is the major endogenous coagonist during light-induced responses in the inner retina of both species. In addition, the regulatory mechanisms of glycine transport and of the endogenous D-serine degrading enzyme, D-amino acid oxidase, have been shown to be essential in maintaining coagonist levels below that needed to saturate the NMDA receptor. Together, the results position D-serine as a major contributor and potential modulator of excitatory neurotransmission in the retina.